From the 99% to the 1%: Osborne bails out the energy fat cats

The chancellor is showering yet more taxpayers' money on energy-intensive mega-businesses, who create just 1% of GDP. Worse, those businesses already crippled and then profited from the very carbon taxes they attack

Steel makers have been among the biggest beneficiaries of windfall gains from unused Europeans carbon pollution permits. Photograph: Nigel Roddis/Reuters

Stealing from the 99% to give to the 1%: sound familiar? Chancellor George Osborne has found a new way to siphon money from the public purse into the pockets of some of the richest businesses on Earth. He has been aided and abetted by business secretary Vince Cable who, a senior civil servant told me, has been "utterly captured" by the corporate lobbyists.

Their craven capitulation to the special pleading of the energy intensive users defies all economic sense and only adds up in one place: the account books of the lobbyists.

This is beyond parody: the shameless industrial lobbying in Brussels so weakened the EU ETS that the energy-intensive giants are already wallowing in an estimated €4bn windfall of carbon pollution permits. The European Commission estimates this will rise to €7bn-€12bn by the end of 2012.

But these colossal cash mountains would be enough to keep jobs in those companies safe, you might think. You'd be wrong. In May, Tata Steel announced it was sacking 1,500 workers in the UK and blamed "EU carbon legislation". At the same time, Tata had banked almost €400m of free money from EU carbon legislation. As a very senior UK businessman said to me: "Powerful people pretending to be victims is really, really offensive."

What's worse is that the energy-intensive industries is a little tail wagging the UK dog, according to Tim Yeo MP, the influential chair of the commons energy select committee. He calls them "past masters at special pleading."

That's a lot of jobs. But compared to the green economy, it's small beer. A study for the department of business found low-carbon and environmental goods and services employed 910,000. The green sector generated £112 billion a year, about 7% of GDP, with half of that revenue in the low carbon and about a third in renewable energy.

We have a government in thrall to a declining sector of industry and throwing yet more of your cash at these international mega-businesses. In the larger and fast-growing green economy, they are slashing subsidies for solar energy by far more than costs are falling, and creating a Green investment bank that can't borrow. The government is bailing out the big polluters, while bailing out from supporting those helping the nation achieve its legally binding emissions targets, curbing climate change and delivering a secure, sustainable economy.

Why? Because while the Chancellor in his desperation for economic growth has now taken to putting government subsidies into almost anything he can lay his hands on, those items which have green labels attached are often left on the shelf. The 20th century economics that pervades the Treasury is one reason, the poisonous and pervasive lies spread by corporate lobbyists and their ideological allies are another.

But perhaps Osborne will yet retain the last remaining scraps of credibilty for the government which wanted to be the "greenest ever". He promised as much in September. We should get the details of the infrastructure projects into which he hopes to plough money on Tuesday. Renewable energy and railways would be welcome, and particularly flood defence schemes, which the government has recvklessly slashed. On the other hand, dirty power stations and lots of roads would be unwelcome.

At the heart of it all is the familiar "jam today" political paradox. Voters will welcome Osborne's largesse in sparing them a planned 3p rise in fuel duty. But when it come to investing for a future in which the nation is not helpless on the hook of soaring fossil fuels prices, voters are incensed. Any politician, however feeble, can sell the former. Only strong, independent ones can sell the latter.